Report: Cryptocurrencies Concerned by the Indian Government Could Affect the Rupee

The Indian government's Cryptography Regulatory Committee is concerned that cryptocurrencies will destabilize the rupee if they are accepted as payments. His concern have been discovered despite evidence that cryptocurrencies do not currently threaten financial stability.

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Impact on the rupee

The Indian government's committee charged with developing the regulatory framework for cryptocurrencies would be "obsessed" with the impact they could have on the rupee if they were allowed to be used in payments, reported Quartz India. The committee is headed by Subhash Chandra Garg, secretary of the Department of Economic Affairs.

"If bitcoin and other digital currencies are allowed to be used for payments, it is very worrisome to know whether it will ultimately be more effective to destabilize the fiat currency," he told the publication. ministers as saying. "The overall impact on the financial ecosystem that it is likely to have is still unclear and it has been difficult to convince them on this particular point."

If bitcoin and other digital currencies are allowed to be used for payments, it is very worrisome to know if it will eventually destabilize the fiat currency.

Garg's panel is finalizing its report containing the country's regulatory recommendations on cryptography, according to the government's response to a right to information filing.

However, the Ministry of Finance told Parliament that "it is difficult to indicate a specific timetable for making clear recommendations" and that the Garg panel "is pursuing the case with caution that s & # 39; required. "

No threat to financial stability

The Financial Stability Board (FSB) published last October a report on the consequences for the financial stability of cryptographic badets. The FSB is an international body that monitors the global financial system and makes recommendations to the G20, an international forum of governments and central bank governors. Its members are financial regulators and central bankers from 24 countries as well as global organizations such as the International Monetary Fund.

Cryptocurrencies require constant monitoring of general financial stability considerations, given the rapid expansion of their use.

The FSB report states that "based on the information available, cryptographic badets do not pose a significant risk to global financial stability for the time being". It notes, however, that "vigilant supervision is necessary in view of the rapid pace of market developments, and if the use of cryptographic badets continues to evolve, this could have consequences for the financial stability of the market." the future. "

Citing the CSF's finding, the Reserve Bank of India (RBI) reiterated in its report on the evolution and evolution of the banking sector in India 2017-2018 that cryptocurrencies do not not a threat at the moment. "However, the market continues to evolve rapidly and this initial valuation could change if the use of cryptographic badets becomes more widespread or interconnected with the core of the regulated financial system," the central bank said. "Cryptocurrencies must be the subject of constant monitoring of global financial stability considerations, given the rapid expansion of their use," concluded the RBI.

Do you think the Indian government should be concerned that cryptocurrencies could undermine the rupee? Let us know in the comments section below.

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Kevin Helms

A student in Austrian economics, Kevin discovered Bitcoin in 2011 and has always been an evangelist. His interests include Bitcoin security, open source systems, network effects and the intersection of economics and cryptography.